Galantas Gold Regulatory News (GAL)

GALANTAS GOLD CORPORATION

TSXV & AIM : Symbol GAL

GALANTAS REPORTS RESULTS FOR THIRD QUARTER 2011

DATE: 28th November 2011  

Galantas Gold Corporation (the 'Company') results for the three and nine months ended September 30, 2011 have been published. 

Net Income for the three months ended September 30, 2011 amounted to CAD$ 445,646 compared to a Net Income of CAD$ 206,069 for the three months ended September 30, 2010. When Net Income is adjusted for non-cash items on the Income Statement (before changes in non-cash working capital), the cash generated from operating activities amounted to CAD$ 792,682 for the third quarter of 2011 compared to CAD$ 358,514 for the third quarter of 2010.

Net Income for the nine months ended September 30, 2011 amounted to CAD$ 1,165,045 compared to a Net Income of CAD$ 810,934 for the nine months ended September 30, 2010. When Net Income is adjusted for non cash items on the Income Statement (before changes in non-cash working capital), the cash generated from operating activities amounted to CAD$ 2,001,466 for the first nine months of 2011 compared to CAD$ 1,538,537 for the first nine months of 2010.

The main reason for the improved results was the higher gold prices achieved together with increased production at its Northern Ireland subsidiary during 2011. Gains were partially offset, however, by an increase in costs during the two intervals.

Production at the Omagh mine during the three months ended September 30, 2011 was well above production levels achieved during both the first quarter of 2011 and the corresponding third quarter of 2010 but below the record quarterly production achieved during the second quarter of 2011. The three and nine-month figures to September 30, 2011 and their comparative 2010 figures are summarized in the table below.

The 2011 production figures and metal contents are provisional and subject to averaging or umpiring provisions under the concentrate off - take agreement detailed in a press release dated October 3, 2007.

Highlights of the 2011 third quarter and first nine months results, which are expressed in Canadian Dollars (CAD$), are:

During the third quarter, Omagh Minerals Limited ('OML') received an environmental compliance study conducted by the Northern Ireland Environment Agency. The report confirmed that OML continued to be within terms of its consent and met the relevant Environmental Quality Standards.

The Company notes that a further delay has been introduced into the planning process regarding road transport of surplus rock. The application is recommended for approval by the Planning Service, Department of Environment, Northern Ireland but has not yet been determined. OML does not have clarity as to a timetable for removal of surplus rock, for which storage at the mine site is limited. Consequently an employment review is continuing which is likely to lead to a reduction in the number of employees, via redundancy procedures (after statutory consultation is complete), due to a switch to the processing of lower grade material.

An active program of drilling is taking place to assess the gold and silver mineralisation at depth on the Omagh property in order to examine potential for underground mining. During 2011 (to the end of the third quarter), a total of 2558.6 metres has been drilled and a total of 33 drill holes completed. Detailed financial studies have been carried out to estimate the cost of underground development and these studies will be released in conjunction with a revised resource report for the property. The report will comment upon the financial studies and be to a standard suitable for publication in Canada (National Instrument 43-101). An interim report is scheduled for late spring 2012.

Plans to develop an underground mine are at an advanced stage and are expected to be submitted for permitting around the end of 2011. The plans include a cut and cover adit within the backfilled open pit (being currently worked), with a spiral decline to the base of a proposed Phase 1 Underground Mine, and a raise-bored shaft to provide emergency egress and ventilation. The principal mining method proposed is shrinkage-stoping and long term stability will be assured by backfilling with waste rock and clean tailing sands. Potentially the mine may progress to deeper levels than that planned for Phase 1 but this will be subject to the identification of further resources by drilling. The current drilling program is designed to identify resources to approximately 350 metres below surface, for a potential Phase 1 mine. Permitting procedures have been commenced in conjunction with continued drilling to enable an earlier determination of planning permits.

An Environmental Impact Assessment (EIA), based upon new data and that from 14 years of environmental monitoring, is being drawn up to be submitted to Planning Service, Northern Ireland. The EIA considers the processes involved, including impact on water, air and noise, amongst other environmental factors.

The detailed results and Management Discussion and Analysis (MD&A) are available on www.sedar.com and www.galantas.com and the highlights in this release should be read in conjunction with the detailed results and MD&A. The MD&A provides an analysis of comparisons with previous periods, trends affecting the business and risk factors.

This disclosure has been reviewed by Leo O' Shaughnessy (Chief Financial Officer) and Roland Phelps (President and CEO), who are qualified under the meaning of N.I 43-101 and who have also reviewed this release for the purposes of AIM requirements. The information is based upon financial and operating data prepared under their supervision.

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS: This press release contains forward-looking statements within the meaning of the United States Private Securities Litigation Reform Act of 1995 and applicable Canadian securities laws, including revenues and cost estimates, for the Omagh Gold project. Forward-looking statements are based on estimates and assumptions made by Galantas in light of its experience and perception of historical trends, current conditions and expected future developments, as well as other factors that Galantas believes are appropriate in the circumstances. Many factors could cause Galantas' actual results, the performance or achievements to differ materially from those expressed or implied by the forward looking statements or strategy, including: gold price volatility; discrepancies between actual and estimated production, the commercial viability of processing lower grade material, actual and estimated metallurgical recoveries; mining operational risk; regulatory restrictions, including environmental regulatory restrictions and liability; risks of sovereign involvement; speculative nature of gold exploration; dilution; competition; loss of key employees; additional funding requirements; planning and other permitting issues; and defective title to mineral claims or property. These factors and others that could affect Galantas's forward-looking statements are discussed in greater detail in the section entitled "Risk Factors" in Galantas' Management Discussion & Analysis of the financial statements of Galantas and elsewhere in documents filed from time to time with the Canadian provincial securities regulators and other regulatory authorities. These factors should be considered carefully, and persons reviewing this press release should not place undue reliance on forward-looking statements. Galantas has no intention and undertakes no obligation to update or revise any forward-looking statements in this press release, except as required by law.

Galantas Gold Corporation Issued and Outstanding Shares total 235,650,055.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Enquiries

Galantas Gold Corporation Jack Gunter P.Eng - Chairman Investor Relations ConsultantRoland Phelps C.Eng - President & CEO Courtenay Heading (Maclir Consulting Ltd)Email: info@galantas.com Email : c.heading@Galantas.com  Website: www.galantas.com Telephone : (UK) +44 (0) 7624 424 455 Telephone: +44 (0) 2882 241100

Religare Capital Markets Telephone: +44 (0) 20 7444 0800 Ben Jeynes/James Pinner

Beaufort International Associates LtdTelephone: +44 (0) 20 7930 8222 Barry Gibb/Saif Janjua (Corporate Finance)

GALANTAS GOLD CORPORATION

Condensed Consolidated Interim Financial Statements (Expressed in Canadian Dollars)

(Unaudited) Three and Nine Months Ended September 30, 2011

Management's Responsibility for Condensed Consolidated Interim Financial Statements

The accompanying unaudited condensed consolidated interim financial statements of Galantas Gold Corporation (the "Company") are the responsibility of the Board of Directors.

The unaudited condensed consolidated interim financial statements have been prepared by management, on behalf of the Board of Directors, in accordance with the accounting policies disclosed in the notes to the unaudited condensed consolidated interim financial statements. Where necessary, management has made informed judgments and estimates in accounting for transactions which were not complete at the balance sheet date. In the opinion of management, the unaudited condensed consolidated interim financial statements have been prepared within acceptable limits of materiality and are in accordance with International Accounting Standard 34 - Interim Financial Reporting using accounting policies consistent with International Financial Reporting Standards appropriate in the circumstances.

Management has established processes, which are in place to provide it sufficient knowledge to support management representations that it has exercised reasonable diligence that (i) the unaudited condensed consolidated interim financial statements do not contain any untrue statement of material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it is made, as of the date of, and for the periods presented by, the unaudited condensed consolidated interim financial statements and (ii) the unaudited condensed consolidated interim financial statements fairly present in all material respects the financial condition, results of operations and cash flows of the Company, as of the date of and for the periods presented by the unaudited condensed consolidated interim financial statements.

The Board of Directors is responsible for reviewing and approving the unaudited condensed consolidated interim financial statements together with other financial information of the Company and for ensuring that management fulfills its financial reporting responsibilities. An Audit Committee assists the Board of Directors in fulfilling this responsibility. The Audit Committee meets with management to review the financial reporting process and the unaudited condensed consolidated interim financial statements together with other financial information of the Company. The Audit Committee reports its findings to the Board of Directors for its consideration in approving the unaudited condensed consolidated interim financial statements together with other financial information of the Company for issuance to the shareholders.

Management recognizes its responsibility for conducting the Company's affairs in compliance with established financial standards, and applicable laws and regulations, and for maintaining proper standards of conduct for its activities.

NOTICE TO READER

Under National Instrument 51-102, Part 4, subsection 4.3[3][a], if an auditor has not performed a review of the interim financial statements, they must be accompanied by a notice indicating that the financial statements have not been reviewed by an auditor.

The accompanying unaudited condensed consolidated interim financial statements of the Company have been prepared by and are the responsibility of the Company's management.

The Company's independent auditor has not performed a review of these unaudited condensed consolidated interim financial statements in accordance with standards established by the Canadian Institute of Chartered Accountants for a review of interim financial statements by an entity's auditor.

The notes to the unaudited condensed consolidated interim financial statements are an integral part of these statements.

Going concern (note 1)Contingent liability (note 20)

The notes to the unaudited condensed consolidated interim financial statements are an integral part of these statements.

The notes to the unaudited condensed consolidated interim financial statements are an integral part of these statements.

The notes to the unaudited condensed consolidated interim financial statements are an integral part of these statements.

These unaudited condensed consolidated interim financial statements have been prepared on a going concern basis which contemplates that Galantas Gold Corporation (the "Company") will be able to realize assets and discharge liabilities in the normal course of business. In assessing whether the going concern assumption is appropriate, management takes into account all available information about the future, which is at least, but is not limited to, twelve months from the end of the reporting period. Management is aware, in making its assessment, of material uncertainties related to events or conditions that may cast significant doubt on the Company's ability to continue as a going concern. The Company's future viability depends on the consolidated results of the Company's wholly-owned subsidiary Cavanacaw Corporation ("Cavanacaw"), the ability of the Company to obtain future financing and to recover its investment in Omagh Minerals Limited ("Omagh"). Cavanacaw has a 100% shareholding in Omagh which is engaged in the acquisition, exploration and development of gold properties, mainly in Omagh, Northern Ireland.

As at December 31, 2001, studies performed on Omagh's mineral property confirmed the existence of economically recoverable reserves. As at July 1, 2007, the mineral property was in the production stage and the directors believe that the capitalized development expenditures will be fully recovered by the future operation of the mine. The recoverability of Omagh's capitalized development costs is thus dependent on the ability to secure financing, future profitable production or proceeds from the disposition of the mineral property. While the Company is expending its best efforts in this regard, the outcome of these matters can not be predicted at this time.

As at September 30, 2011, the Company had a deficit of $26,016,985 (December 31, 2010 - $27,182,030). Management is confident that it will be able to secure the required financing to enable the Company to continue as a going concern. However, this is subject to a number of factors including market conditions. These unaudited condensed consolidated interim financial statements do not reflect adjustments to the carrying values of assets and liabilities, the reported expenses and financial position classifications used that would be necessary if the going concern assumption was not appropriate. Such adjustments could be material.

The Company was formed on September 20, 1996 under the name Montemor Resources Inc. on the amalgamation of 1169479 Ontario Inc. and Consolidated Deer Creek Resources Limited. The name was changed to European Gold Resources Inc. by articles of amendment dated July 25, 1997. On May 5, 2004, the Company changed its name from European Gold Resources Inc. to Galantas Gold Corporation. The Company was incorporated to explore for and develop mineral resource properties, principally in Europe. In 1997, it purchased all of the shares of Omagh which owns a mineral property in Northern Ireland, including a delineated gold deposit. Omagh obtained full planning and environmental consents necessary to bring its property into production.

The Company entered into an agreement on April 17, 2000, approved by shareholders on June 26, 2000, whereby Cavanacaw, a private Ontario corporation, acquired Omagh. Cavanacaw has established an open pit mine to extract the Company's gold deposit near Omagh. Cavanacaw also has developed a premium jewellery business founded on the gold produced under the name Galántas Irish Gold Limited ("Galántas").

As at July 1, 2007, the Company's Omagh mine began production.

The Company's operations include the consolidated results of Cavanacaw and its wholly-owned subsidiaries Omagh and Galántas.

The Company's common shares are listed on the TSX Venture Exchange and London Stock Exchange AIM under the symbol GAL. The primary office is located at 360 Bay Street, Suite 500, Toronto, Ontario, Canada, M5H 2V6.

The unaudited condensed consolidated interim financial statements were approved by the Board of Directors on November 22, 2011.

IFRS will replace current Canadian generally accepted accounting principles ("Canadian GAAP") for publicly accountable enterprises, including the Company, effective for fiscal years beginning on or after January 1, 2011.

These are the Company's third IFRS unaudited condensed consolidated interim financial statements for the third quarter of the first IFRS consolidated annual financial statements to be presented in accordance with IFRS for the year ending December 31, 2011. IFRS 1, First-Time Adoption of IFRS ("IFRS 1") has been applied and the impact of the transition from Canadian GAAP to IFRS is explained in note 21.

These unaudited condensed consolidated interim financial statements have been prepared in accordance with International Accounting Standard 34, Interim Financial Reporting ("IAS 34"). They do not include all of the information required for full annual financial statements.

The accounting policies set out below have been applied consistently to all periods presented in these unaudited condensed consolidated interim financial statements. They also have been applied in preparing an opening IFRS financial position at January 1, 2010 (note 21) for the purposes of the transition to IFRS, as required by IFRS 1. The accounting policies have been applied consistently by the Company and its subsidiaries.

These unaudited condensed consolidated interim financial statements have been prepared on a historical cost basis with the exception of certain financial instruments, which are measured at fair value. In addition, these unaudited condensed consolidated interim financial statements have been prepared using the accrual basis of accounting except for cash flow information.

In the preparation of these unaudited condensed consolidated interim financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the period. Actual results could differ from these estimates. Of particular significance are the estimates and assumptions used in the recognition and measurement of items included in note 3(e).

The unaudited condensed consolidated interim financial statements incorporate the financial statements of the Company and its subsidiaries.

The results of subsidiaries acquired or disposed of during the periods presented are included in the consolidated statement of comprehensive (loss) income from the effective date of acquisition and up to the effective date of disposal, as appropriate. All intercompany transactions, balances, income and expenses are eliminated upon consolidation.

The following companies have been consolidated within the unaudited condensed consolidated interim financial statements:

The unaudited condensed consolidated interim financial statements are presented in Canadian Dollars ("CAD"), which is the Company's presentation currency.

Items included in the financial statements of each of the Company's subsidiaries are measured using the currency of the primary economic environment in which the entity operates (the "functional currency"). The functional currency of the subsidiaries is the U.K. pound sterling (GBP).

Assets and liabilities of entities with functional currencies other than CAD are translated at the period end rates of exchange, and the results of their operations are translated at average rates of exchange for the period. The resulting translation adjustments are recognized as a separate component of equity.

The rates used for the translation were obtained from the official website of the Bank of Canada.

The preparation of these unaudited condensed consolidated interim financial statements requires management to make certain estimates, judgments and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and reported amounts of expenses during the reporting period. Actual outcomes could differ from these estimates. These unaudited condensed consolidated interim financial statements include estimates that, by their nature, are uncertain. The impacts of such estimates are pervasive throughout the unaudited condensed consolidated interim financial statements, and may require accounting adjustments based on future occurrences. Revisions to accounting estimates are recognized in the period in which the estimate is revised and future periods if the revision affects both current and future periods. These estimates are based on historical experience, current and future economic conditions and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

Critical accounting estimates

Significant assumptions about the future that management has made that could result in a material adjustment to the carrying amounts of assets and liabilities, in the event that actual results differ from assumptions made, relate to, but are not limited to, the following:

·; the recoverability of accounts receivable that are included in the unaudited condensed consolidated interim statements of financial position;

·; the recoverability of deferred development and exploration costs incurred on the Omagh mine;

·; the estimated life of the ore body based and the estimated recoverable ounces or pounds mined from proven and probable reserves of deferred development and exploration costs which are included in the unaudited condensed consolidated interim statements of financial position and the related amortization and depreciation included in profit or loss;

·; the estimated useful lives and residual value of property, plant and equipment which are included in the unaudited condensed consolidated interim statement of financial position and the related amortization and depreciation included in profit or loss;

·; the inputs used in accounting for stock-based compensation transactions in profit or loss;

·; management applied judgment in determining the functional currency and presentation currency based on the facts and circumstances that existed during the period;

·; management assumption of amount of material restoration, rehabilitation and environmental, based on the facts and circumstances that existed during the period; and

·; management's position that there is no income tax considerations required within these unaudited condensed consolidated interim financial statements.

Critical accounting judgments

The determination of categories of financial assets and financial liabilities has been identified as an accounting policy which involves judgments or assessments made by management.

Transactions in foreign currencies are translated to the respective functional currencies of the Operations at exchange rates at the dates of transactions. Monetary assets and liabilities denominated in foreign currencies at the reporting date are retranslated to the functional currency at the exchange rate at that date. Non-monetary assets and liabilities denominated in foreign currencies that are measured at fair value are retranslated to the functional currency at the exchange rate at the date that the fair value was determined. Foreign currency differences arising in retranslation are recognized in profit and loss, except for differences arising on the retranslation of available-for-sale equity instruments which are recognised in other comprehensive (loss) income. Non-monetary items that are measured in terms of historical cost in foreign currency are translated using the exchange rate at the date of the transaction.

The Company's financial instruments consist of the following: